Duty Free: why telling the rich they have a responsibility to give is wrong

Should we tell the rich they have a responsability to give? Image by Zach Grantham via Flickr

Naming and shaming the rich and famous for their perceived lack of generosity is yielding gains for charities as well as headiness in the media. However, bullying tactics are unlikely to benefit anyone in the long run.

There is a clear and seemingly increasing trend, especially in the United States, for the media to highlight the individual giving of the famous and famously wealthy, but also to turn the spotlight onto those who they perceive to be miserly in their philanthropic endeavours.

But what adds to the attraction of such stories is the sense that naming and shaming the super rich for their apparent lack of generosity is, in this time of unprecedented income inequality, a public service. Holding the rich to account for their efforts to redress the ills of a social order from which they have benefited disproportionately, would seem to be laudable and consistent with the idea that a free press exists to ask difficult questions of the powerful on behalf of the masses.

Indeed, the current climate presents an ideal opportunity to scare and coerce the rich into using philanthropy to mitigate personal risk. On one hand the International Monetary Fund has warned that expanding inequality is threatening economic growth and attendees at World Economic Forum were warned that a continuation of the trend could lead to widespread social unrest and system failure. On the other hand, billionaires now have the ability to publicly signal their generosity by signing the Giving Pledge.

All in all, the above factors point to a continuation of the current trend for naming and shaming the philanthropic shortcomings of the very wealthy. Though one might imagine, and it may even be true, that such an approach will lead to an overall increase in funds for not-for-profit organisations in the short term at least, I believe that if we continue to use such tactics there will be few winners in the long run. I believe this for three key reasons:

1. Duty is a poor motivator

The psychology of giving is a subject of much research and conjecture so I hope you will forgive this simplification. Our recent report “Why We Give” revealed that many donors are motivated by a sense of duty to “give back”. It may seem logical then that fundraisers would seek to remind potential donors of their civic duty to give. However, in reality people do not respond well to being told by others that they have a responsibility to spend their money in a certain way.

This negative reaction essentially boils down to our understanding of benevolence and free will. If we do something because we are expected to, it is hard to gain gratification from that act. In fact, for many people the natural instinct is to resent or even try to avoid such duties. How many of us feel the warm glow of altruism when filling in our tax returns?

Anyone who has been involved in fundraising understands that donors give when you appeal to their better selves. They want to solve problems, support causes which resonate with their values and experiences and they want to feel that their generosity can make a difference.

2. Reciprocity is the unintended consequence

As stated above, reminding people of their responsibility to give is not necessarily an effective motivator for increased giving. However, it may be that publicly exposing an individual for reneging on that responsibility has the effect of forcing them to increase their giving to protect their reputation. But robbed of the emotional rewards inherent in acts of benevolence having been effectively forced to increase their charitable giving, might it be that “donors” are more inclined to give in ways that serve their personal, political or business interests?

I do not want to engage in a political debate on the relative reciprocity of donations to certain causes. Rather, what is of interest to me is the fact that such arguments appear to be increasing in frequency and ferocity in parallel to the public naming and shaming of unwilling philanthropists. In this view those debating whether the philanthropy of American billionaires, the Koch brothers, is “self interested” are missing the really important question: By effectively forcing people to give and thus negating benevolence are we fuelling the pursuit of reciprocity?

3. You can’t fight a wrong with another wrong

In my previous blog I questioned whether we are focusing too much on the philanthropy of the rich and famous, or rather, too little on the generosity of ordinary people. Given the fact that the poorest often give a higher proportion of their income to charity than the richest in society (this is true in the USA and the UK at least) shouldn’t we do more to celebrate their efforts? I argue that, and the Future World Giving project argues that, by focusing on engaging the general public in giving, especially in developing nations, we could help to transform societies for the better. The example that we set in developed philanthropic economies will be instructive for the development of giving culture worldwide. As such, we should seek to balance the desire to celebrate the individual, with the need to recognise the generosity of the many.

Let us be clear. I am not saying that we should not celebrate the philanthropy of the rich. Far from it. In fact, I believe that they should give more. Much more. But the excessive focus on celebrating “star philanthropy” may well be unhealthy. For some, the current trend of criticising the lack of giving – particularly amongst business leaders – is the antidote to a sycophantic culture of celebrating wealth. But given that this strategy also focuses on the wealthy, it merely perpetuates the problem that it seeks to fix.

Addressing the philanthropy paradox

Globalisation and market liberalisation has brought about rapid economic growth but the associated trends of decentralisation and privatisation have ensured that whilst millions have been lifted out of poverty, the wealthy have benefited disproportionately. In an increasingly unequal economy we are necessarily looking to the top 0.7% of the global population who hold 41% of the wealth to provide much needed charitable funds. But we should be clear about the message that we send by suggesting that philanthropy is the antidote to inequality.

Appealing to the rich to redress the problem of widening inequality is self-evidently an attempt to deal with the symptoms rather than the cause. Indeed, some argue that philanthropy only serves to placate calls for reforms that would address the root causes of inequality and that it may even “aggravate absolute inequality in welfare achievement”. So does that mean that we should stop encouraging the wealthy to engage in philanthropy? Absolutely not.

Rather, we should see the donations of the wealthy as potential seed capital for wider social movements for good. But we also need to recognise that for any movement to really be transformative, it needs mass public support.

Real societal change occurs when ordinary people join forces to achieve extra-ordinary things together. When I think about the potential of charitable giving, I picture the potential power of our combined generosity of time, effort and faith, as well as money. When the worlds wealthiest citizens choose to support such endeavours of their own free will they should be celebrated for it. Because charitable giving should be an expression of optimism and hope, not a public relations tool to deflect criticism.

FWG1 – ‘Unlocking the potential of global philanthropy’

Our first report aims to estimate the possible extent of charitable giving around the world if governments and the voluntary sector were to harness the potential of the huge expansion of the middle classes.

FWG2: Building Trust in Charitable Giving

Future World Giving: Building Trust in Charitable Giving

FWG3: Enabling an Independent Not-For-Profit Sector

‘Future World Giving: Enabling an Independent Not-For-profit Sector’ warns that poor legislation on not-for-profit campaigning and independence could jeopardise efforts to promote giving among new generations of middle class people emerging across the world, which otherwise could contribute up to $224 billion a year to good causes by 2030.

FWG 4: Donation States: An international comparison of the tax treatment of donations

Comparing the tax incentives on offer for giving and the system through which they are offered in 26 nations.